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Why is the rise of online communities a good thing for customers and businesses? Is social networking and marketing an essential or accidental component of this shift? And what are the actionable principles behind the emergence of communities, that we may evaluate the quality of our online communities and understand what causal factors we should adjust to improve them? Here are some working thoughts about these questions.

Definition of Community

A community is a System Level 5, or societal, level of human organization. System Levels 1-5 are defined as follows:

• Level 1: Individuals, Personal, or Intrapersonal
• Level 2: Dyadic, or Interpersonal
• Level 3: Small group, or Intragroup
• Level 4: Organizational (Group of groups), or inter-group
• Level 5: Societal (which can be multi-level), or inter-organization

Communities can contain all other System Levels as members, but are normally made up primarily of Individuals.

The defining characteristics of community are mutually altruistic relationships among members, and the “facilitator” function performed by some designated sub-organization or individual within the community. Without mutual altruism and the facilitator functions, communities break down into masked attempts to control people, private interest groups, or a loose assembly of individuals without much relationship or common purpose.

The other System Levels exhibit different defining characteristics, listed below:

• From personal (1) to dyadic (2): communication
• From dyadic (2) to small group (3): management
• From small group (3) to organization (4): organizational structure
• From organization (4) to societal (5): altruism & facilitation

How Businesses Can Function as Communities

When a business forms a community, it does this by shifting over from the Service Provider-orientation, which is traditional to business, to performing the community facilitator (or “community organizer”) function within its market:

• Formulates, expresses, communicates, and upholds the common goals of the community
• Organizes the community (an ongoing process)
• Facilitates a good fit among members
• Contributes its expertise to the community
• It is also a member of the community
• Somewhat like a combination of matchmaker & marriage counselor

Members of the community include:

• Customers
• Suppliers
• Employees
• Traditional Competitors

Benefits of Businesses Becoming Online Communities

• Switch from an adversarial relationship among stakeholders to a cooperative relationship. Literally, a coming together as one body.
• Shift of command-and-control style of running a business, where R&D, Marketing, Sales, and Support are managed as line departments with the aim of conquering the company’s market, to a network of members performing a wide variety of roles: a member may be a customer in the morning, market your services to other potential members in the afternoon, offer tech support in the evening, and offer product-improvement recommendations and beta testing at night, all for free.
• The community model is a much more developed form of organization than even traditional business models, capable of generating more wealth, more benefits, faster, cheaper, more scalably, more durably, reliably, and much higher levels of stakeholder satisfaction
• The community orientation is able to support much more variety, because it is based on much more specific purposes (compare recruiting purposes with communication purposes)
• Communities foster interactions that deepen and broaden over time, whose mutual benefits increase over time, creating a positive feedback-loop, creating more and more incentives for its members to stay related and contribute to each other.
• Their optimal size may be much larger than that of other forms
• Community forms are capable of organizing more members with more variety
• This means that it is also more capable at scaling than other forms
• Communities may get more valuable as they increase in size, up to a sweet spot

Challenges Companies Face In Becoming Communities

• Lack of a strategic vision that is capable of reconciling the unmet desires of all potential types of members of the community into a common purpose. A community common-purpose is a prerequisite for being a functioning organization at all. Many companies will find that they are out to get one or more group of stakeholders who would otherwise have to be included in the community.
• Fundamental shift in developmental stage of their organization
• Turns many departmental functions and established relationships inside-out
• Looks like a radical loss of control
• Requires really trusting your customers and your staff
• Less developed managers will always be tempted to rig the game by offering one-sided incentives to some members at the expense of others, such as by paying people to advocate the company’s products. Except for the exchange of actual products and services, no money should change hands.

Some Conclusions

One of the things I wanted to be clear from this is how woefully inadequate social-networking functionality is to forming and maintaining communities. A “network” is just one piece of the puzzle. Social networks provide (or should provide) infrastructure for the community to communicate and collaborate as a whole, and be an enabling platform for the services offered by its members.

Another thing that should be clear is that the shift from a traditional command-and-control, broadcast-oriented business to a community is not principally a marketing issue. It has everything to do with the fundamentals of your business model, your company culture, management style, and organizational structure.

These are just some early thoughts that I will expand on and revise over time. I’m compiling numerous case studies to illustrate the special properties of communities, how to evaluate them, improve them, and set them up.

Yesterday, I read this article in Fast Company, on Usability vs. Experience with regards to the design philosophies of Google and Apple. The article seemed to perpetuate a seemingly ubiquitous confusion about usability and experience, which I thought I would try to put my finger on here:

Usability vs. Experience is the wrong distinction for explaining the difference between Google and Apple’s design approaches, and a common misunderstanding, even by those who use it to explain their work. The right distinction is about what “rung” on the problem/solution ladder a particular product design is intended to address. To explain:

For any human desire, there is a hypothetical “problem-solution ladder” that can be constructed, of ends and means, that gets you from the expressed desire to its satisfaction. Products can be said to exist as means to satisfy those desires as ends.

However, companies, esp. engineering-oriented companies, generally focus too low-down on the ladder, and produce and market products that focus on the means, and forget about, or are unclear about, the ends for which those products are really used. Other companies, like Apple, have a clear eye on the ends – they have been making products to address the same ends over and over again for years, trying to perfect the achievement of the ends (that is Jobs’ vision), ends which have to do with productivity, lifestyle, personal identity, entertainment, enjoyment, connecting with people. They eschew means in two ways: 1) by making the interaction as much a direct expression of the ends as possible (e.g., surface interfaces vs. keyboard and mouse; mobile vs. at your desk), and 2) by making the means, where it must show itself, as invisible as possible, or if they must be visible, as beautiful and appealing as possible so we may love them as things in themselves and forgive them their less than human intelligence and empathy.

This explains another element of Apple’s strategy: vertically integrated innovation, from hardware, to  devices, to software, to marketing. I have not worked out the details yet, but it seems to me that the market forces that drive traditional tech companies towards modular product architectures (usually reduces costs, allow companies to focus more on core areas, get performance boosts from specialization of components, opens up new markets of innovation led by third parties that ultimately serve to enhance the value of your product) may involve making trade-offs whose severity worsens the closer you get to the specific human ends to which we put such modularized products. With every modularization comes a generalization, standardization, a loss of control, a making rigid of piece of the ‘means’ outside its purposeful context in the whole. As these trade-offs roll up the problem-solution ladder to the ultimate ends of the products for their users, they end up becoming an increasingly limiting factor on the quality of the result. This may be a version of Christensen’s modularity vs. inter-dependence hypothesis.

The services of 10 usability firms that I have experienced and surveyed over the past 13 years, as well as my own past practice as a usability expert, and the three standard treatises on the subject by Jacob Nielsen, Donald Norman, and Alan Dix et al., are all heavily influenced by two root metaphors (to borrow this concept from Lakoff and Johnson), whose effect—in terms of metaphorical consistency—helps to explain why the services take the approach that they do, and why it is inadequate for most non-trivial websites or software.

Metaphoric Families that Influence Usability Services

A Website is a Machine. This family of metaphors includes

■ User-Interface is a Control Panel.
■ Buttons, Links, Fields, etc., are Controls (levers, gears, switches, & dials)
■ Interacting with a Website is Using a Machine
■ Usability is Efficiency of Operation.

A Website is a Place. This family of metaphors includes

■ A collection of hyperlinked information is a Site
■ A User is a Visitor
■ Users are Traffic
■ Finding information on the website is Navigation
■ Efficiency is Ease of Getting Around
■ Displaying a web page is Going Somewhere (to the page)

In the general case, the use of metaphors has great influence over the experience of someone who uses them. Perceptually, it is very influential in determining what you notice—the differences the make a difference to you, and therefore what you pay attention to and what you ignore. Cognitively, they have a great influence over how you construe the things that you do notice.

Usability firms and experts employ these two metaphorical families widely in their services without realizing they’re using them. As explicit metaphors, they serve to influence the perspective that these people take when they analyze and assess a website. Metaphoric consistency serves to keep them in these families, so that the use of some of these metaphors leads to more and more use of it within these two families, thereby coloring the way they think about and talk about websites.

Simple vs Complex Purposes

If we go deeper under these root metaphors, we can see what is really going on, and it comes down to this word “Use.” In talking about our purposes and the means we employ to pursue them, it is important to make a distinction between “simple” versus “complex” purposes.

A simple purpose is one where you can directly achieve the purpose by action or using a tool : for example, using the toilet, or using a door, or using a hammer to hang a picture frame.

Complex purposes are those where this 1:1 correspondence is lacking, where there is a 1-to-many relationship between the purpose and the activities that roll up to it. For example, if I ask, “What are you doing?” and you reply, “Well, I’m using Excel,” that would be an appropriate answer if my question was about a simple purpose, such as, “what application are you using?” If I want to know for the sake of what are you are using Excel, then I am in the realm of complex purposes. Are you creating report, calculating payments, analyzing stock prices, or what? Here the purpose is complex. Using the tool (Excel) does not directly accomplish the purpose.

To connect this with the ideas we began with, metaphoric families based on the word “use” are suitable only for contexts where the purposes are simple. This is because “use” suggests “simple effectuation,” not employment for a purpose. The problem is one of a blinding emphasis—making “use” central, as opposed to what end.

When usability practitioners think in terms of “use,” they are assuming that what they are assessing is used only for simple purposes. For a website, this means that what a visitor is doing is “using the website.” Well, that will only be appropriate for analyzing and assessing the website, if what the user is trying to do is simple. If not, it will be very misleading. That’s how you get to the bottom of what’s wrong with the field of usability, and with a lot of UX in general.

Both metaphorical families, Website as Machine and Website as Place, are only consistent with simple purposes, which is why they are inappropriate ways of thinking about most websites. In the case of Website as Machine, the website is construed as something like a power plant, whose ultimate purpose is taken for granted. The only issue the operators have is how easy it is to control. In the case of Website as Place, the website is conceived of as a road system laid out with junctions and signs, where the drivers’ purpose is merely to get to their destination, but what they’ll do when they get there is taken for granted.

Implications for Usability Testing

Usability Testing is typically only adequate for applications whose entire reason for being is a simple purpose or set of simple purposes. This is because the simple task-level is all that is ever tested, and only applications with simple purposes have a high correlation between ease of functionally control (”use”) and their true purpose. For example, a calculator can be evaluated this way, but not accounting software. This is why so much usability work is really just putting lipstick on the pig. A test can result in great scores, and yet the application still doesn’t do what its users actually need, or what the business who produced it wants. Or, conversely, a usability test will identify myriad usability problems, all of which would be terrible if what the user was trying to accomplish was a simple purpose, but which are much less important, or irrelevant, when their complex purpose is correctly understood.

Let’s see an example of the difference in the predictability of ‘using’ a thing vs. its true fitness for purpose for a machine with a simple purpose, such as a car, vs. an application with a complex purpose, such as accounting software.

The Four Levels of Application Quality & Testing

In conclusion, we can summarize all this by proposing four levels of application quality, all of which have to be tested differently, against different criteria that are defined by critically important work that takes place at different steps in the software planning, design, and implementation process. Note that #4 is usually omitted, or taken for granted, or done badly.

1. Execution: no bugs, executes without errors, based on code-level test procedures. Testing often automated.
2. Functional: everything works as per the design, faithful to the design. Requires human inspection – this is where “acceptance testing” usually lives, and where contractual responsibility ends for any third-parties developing the application.
3. Usability: easy to understand, easy to control, quick to use , based on interacting with the UI to accomplish the tasks that the application is designed to accomplish (defined in the conceptual design or ‘requirements’)
4. Fitness for Purpose: enables users to accomplish each of their relevant aims easily and effectively while generating the benefits the business wants from it. These criteria are usually defined as part of the strategic plan for the application. This includes branding criteria and other non-functional characteristics that should be included as important components in the experience of the application.

New Metaphors for Usability

If we ask the question, why does the usability field suffer from this blindness about complex purposes? One partial answer is that the discipline of usability emerged historically from industrial-design testing, and industrial design is the design of machines and  tools, most of which are instruments with simple purposes. We see the same blindness at work when software developers are referred to as “engineers”. Website design is, by comparison, the design of systems of informing and communicating. The right metaphors are ones based on communication between sentient beings, albeit one side is much stupider than the other. Some initial suggestions below:

• “A website is a form of communication.”
• “Usability is communication quality.”
• “A user is a participant in a dialog.”
• “A website is a virtualized person, group, or company.”

What is it about the rise of the Internet that naturally inclines companies toward more developed business models? We can use the idea of challenge vs. skill to describe how the rise of the Internet has raised the challenge organizations face to level that cannot be coped with using Subjective-stage business models.

Balance of power shifts toward customers; companies lose control over customers

1. More accurate information is easily available about products, benefits, alternatives, so customers aren’t dependent on company advertising for info
2. Customers are now going beyond the traditional customer role (the concept of “customer” itself is rooted in the Authoritative and Subjective stage), acting as reviewers, suppliers, regulators, sales, marketing, support, & R&D
3. Customers have more choice in virtual marketplace without barriers of time & place
4. Customers are now free agents, with much more control
5. With less control over customers, companies must try to satisfy free agents
6. This requires a more developed business-model

Effects on companies of changes in communication

1. Speed of communication accelerates rise and fall of products & services
2. Can communicate at much lower cost with fewer barriers & higher quality
3. Easier to learn what customers want and what it will take to satisfy them
4. More opportunities for tight feedback loops allow products/services to improve faster

New opportunities for companies

1. Easier to offer highly specialized products/services
2. Lower cost of operating

Negative consequences for companies

1. Worsening consequences for bad behavior by companies

Developmental stage

1. Subjective stage used to be adequate to companies’ challenges, given the control they had over customers (& lack of control customers had)
2. In the Objective Stage, marketing becomes informing & sales becomes consulting & problem solving.
3. In the Abductive Stage business-model (Communities), many of the functions of standard line-departments in organizations can be accomplished by members of the community. You just have to facilitate that happening.
   • Market research
   • R&D
   • Marketing
   • Support

What it will take to get companies to shift to a more developed business-model

1. Start ups
2. Small companies
3. Small groups or departments in big companies

(Compare the effect of Consumer Reports when it was founded in 1932. The bare fact that companies for decades have tried to put CR out of business by suing it (unsuccessfully) shows you what the real business models of most companies were at that time)

An Alternative Perspective

My friend and colleague, Peter Kassan, responded to this post with a counter-perspective to mine that is also highly worth considering:

If it were true that customers were more empowered and had greater influence on companies, one would expect that there would be less domination of industries by single companies (or only a few), less consolidation (as companies specialized to serve narrower customer niches), and more competition. Instead, we see a number of tendencies in the opposite direction:

• In areas like personal computers and their operating systems, search engines, shopping sites, business and social networking sites, and so on, we’ve seen more and more winner-takes-all effects. Although companies still rise and fall (perhaps quicklier than before), Microsoft and its major products (both operating system and office applications) has totally dominated the business market and to a large degree  the home and home-office market for something like twenty-five years (although Apple does have a small but significant share). Google has an overwhelming majority of the search-engine market, and it’s not because consumers have tried all the other search engines and found Google to be superior. Linkedin, Facebook, Meetup, and Twitter all dominate their respective networking spaces precisely because of the networking effect. Also, people are lazy and tend to gravitate to the name (whether website or physical store) that’s most familiar–such as Amazon and Best Buy.
• In areas like banking and finance, there are fewer, larger players than ever before. Again, this isn’t because consumers have found them to be overwhelmingly superior, but for other, far more complicated reasons.
• Capital-intensive industries such as automobiles, oil and gas, cable, telephone, and manufacturing have also experienced increased consolidation.
• The “big box” stores (especially Wal-Mart) have never been bigger.
• There may indeed be more communication between companies and their customers and prospects, but that doesn’t mean that companies have necessarily become more responsive to their customers (except in the most superficial sense) or more responsible to anyone, even including their shareholders (as executives enrich themselves: the agent-principal problem). Even though it’s become easier (even trivial) to put up a website and declare oneself in business, it’s no longer true (if it ever was) that if you build it, they will come. The Internet has made the fight for market share and audience attention more difficult–and before you can have a conversation with your customers and prospects, you have to have customers and prospects.
• The fact that a few companies (out of literally millions of start-ups) have risen to become multibillion dollar enterprises very quickly doesn’t mean that the rest of the world has changed.
• Also, as the rise of business analytics indicates, companies are drowning in data as much as we as individuals are. With the overwhelming quantity of data about customer habits, companies are struggling to make sense of it so that they can make sense of it and exploit it. This is not the same as a conversation between equals.

1. Authoritative stage: based on establishing a relationship with customers based on need: create a monopoly, create addiction, be the authority, obligate customers. (Dependency)
2. Subjective stage: home of the buy/sell, mercantile orientation. Win/lose, zero sum game. Flow of benefits is from the customer to the company only. Purpose of sales and marketing is to do whatever it takes to get the customer to part with their money. Counter-dependent, in that the things such companies try to do show that they are always reacting to customers, boasting about their services, trying to be different. Customers construed as stakeholders who must be won over, persuaded, convinced, and who will do what you want if you can kind the right trick to convince them.
3. Objective stage: purpose is to satisfy customers and thereby gain. Complimentary relationship between customers and companies. Customers construed as free agents who make decisions based on their own judgement and information-gathering. Instead of marketing and sales, there is informing, communicating, and a problem-solving orientation. (Independence)
4. Abductive stage: mutual ongoing relationship of complementary and common aims. The marketing and sales functions dissolve. Communities arise.

In our UX/product development field, it is very helpful to distinguish clearly between the kinds of strategic investigations that should precede user research, and the user research step itself. It is additionally helpful to be clear how strategic investigation and user research differ drastically from all kinds of market research. This is important for anyone in the product-development field because these early steps are formative and this type of inquiry is commonly mistaken for market research, which has a different and incompatible purpose and methodology. It is also important for potential clients engaging in user research or market research to understand these distinctions, because they are particularly confused about this and their products and services are the ultimate victims of the confusion.

First, a fundamental question: What is a company? A company might be said to be a vehicle to connect providers to recipients to satisfy their inadequately-satisfied desires in return for various business benefits, whether it be to do God’s work, or profit. Products and services are the means by which recipients get satisfaction. Enter product development, center stage.

User Research is the investigation into who those categories of users are, what they want, to what degree, how well satisfied by competitors, and what opportunities there are to satisfy them better. Unlike market research, it is primarily interested in the fundamentals of unmet desire, not customer trends. Trends are only important to the degree they predict the degree of unmet desire (generally, as a function of competitors and alternatives), or predict certain characteristics about how such desires could be best met (e.g., cell phone penetration for a service that would best be delivered via a cell phone).  Most importantly for understanding the strengths and weaknesses of market research for product development, no good research or prediction of trends can be done until a sound understanding of user aims has been completed, because, otherwise, you don’t know what to look for, what questions to ask, or how to evaluate the answers.

A trend is only important relative to the unmet desire it affects. Most market research lacks these conceptual prerequisites, and this is the single biggest reason that market research is usually a poor guide to product development. In the absence of sound understanding of these prerequisites, the market research discipline flails around trying reason from the frequency distribution of trends it can discern because of their popularity or “trend-iness”, which often gets dumbed-down to easy things to measure, such as frequency by demographic characteristics. This type of research usually has little relevance for understanding the true aims of your customers and how well they are accomplishing them, and so offer little or no help to the product manager.

The discussion above distinguishes user research from market research. What, then, is this beast that I call “strategic investigation”?

Neither user research nor market research call the type of company “vehicle” into question. They do not question its capabilities, or its selection of who it thinks its customers really are. It does not question the company’s position in the transactional chains that it participates in, or evaluates alternatives. This is what strategic research does.

For example, suppose I am in the travel agency business in 1995 and I want to translate my ticket-booking services online. This is a natural thing to want to try to do: lower transaction costs, increase customer reach, while taking advantage of the cost structure of my business (the margins charged by travel agents). User research would not detect the following problems (I throw these in as examples, not necessarily reflecting the true history of the online travel industry):

1. The travel agent business model is an intermediary in a transactional chain between passengers and airlines that is based on the difficulty for those two sides to do business together easily by themselves.
2. The Internet makes it possible for those two sides to get together without you, so they have motive to wipe you out and pass on the savings to themselves, lower prices, and make more money
3. The systems on which your ability to do business depends is owned by giant consortia of airline companies, such as Sabre. Thus they have the means and opportunity to wipe you out.
4. The airline industry had not made many moves in this area, but industry pundits are talking about it, but estimate it is maybe 1-3 years off. (Travelocity was founded in 1996, by Sabre Holdings).
5. The advantage would be temporary, until the opportunity for “arbitrage” expired as a result of eventual market efficiencies, say in 10 years.

Now, consider doing User Research armed with this information. Would you do it differently? Your client might have asked you to look specifically for the strengths and weaknesses of the online travel agency model, not simply try to translate your services online to cut costs and scale. For example, you might focus on more than just ticket sales, but expand your service offering to include decision-support for vacations and conferences, or focus on last-minute travel, which most of the travel sites, thinking of themselves as just clearing houses for tickets, still don’t consider. Further, you would be fairly confident that it is almost inevitable that the airlines are going to find a way to dominate this market (as they do now with Travelocity and Orbitz), and you could make the right technology choices and business partnerships to make yourself a favorable acquisition target when the airlines come knocking, as they did, to figure out the easiest way to reap the advantages of the Internet and contain the competition. And, finally, you might decide never to attempt this project in the first place, but shift out of the industry altogether, which would have been an excellent business decision for many travel agencies.

I once had to design an online checkout process that accommodated an extremely wide range of product types: lodging, tickets, rentals, lessons, air transportation, vacation packages, season passes, lockers, retail items, travel insurance, gift cards, events, and rewards cards. To accomplish this information-architecture miracle, I first had to answer the question: is there a manageable scheme that is capable of fully describing all of the differences that could make a differences to sales and checkout for the target set of product types? Here is my scheme, which has since stood the test of time on other projects:

Introduction

Naming a company or product is part of what is traditionally referred to as “branding.” I have sat through many silly exercises and long, inefficient engagements conducted by branding companies designed to elicit a great name for a company or product. As a digital product-strategy consultant, I often find myself in the branding business, and I use an extremely rational, fast, yet very creative process, summarized below.

Stripped to its bare, rational essentials, branding is just the process of designing the verbal and non-verbal “identifiers” that single out a company and its products and services from the crowd, and groups them together into a recognizable family. Verbal identifiers are the names, taglines, and taxonomies for the company and its products and services. Non-verbal identifiers are commonly logo and corporate styles for palette, typography, stationery designs, copywriting, etc.

As part of this effort, we find a way to communicate, to the degree possible, the kind of customers, the kind of their unmet needs, the kind of benefits, and kind of product features relevant to the company while warding-off potential misunderstandings or negative associations. When done well, this is of great help to the company’s marketing and sales function. Only naming is addressed in this post.

1. What is a name for?
2. What distinguishes a good name from a bad one?
3. What difference does a good name make?

Drawbacks of a Poorly-Chosen Name

A poor name is a barrier to marketing and sales:

1. Confuses customers about what the company does or who they are
2. Misleads customers
3. Undermines confidence in the company and its products and services
4. Thwarts attempts to remember or use the name to connect with the company
5. Gives marketing and sales departments a lot of unnecessary and expensive work to do to overcome drawbacks of name

Benefits of a Well-Chosen Name

A good name facilitates marketing and sales by communicating, directly or indirectly:

1. Who potential customers would be (self-select themselves as potential customers)
2. The type of products or services offered
3. Reputation, authority, and scale of company

Criteria for a Company Name

The following outline is the criteria for a good company name. The importance of each criteria depends on the specific company situation. They should be rated before they are used. I have divided them into primary (which apply significantly to almost every situation) and secondary (varies with the type of company.)

Primary Criteria

1. Usable: short and easy to spell, ease to abbreviate
2. Categorizing: indicates what industry or type of company and/or type of products or services and/or who potential customers would be (context before content), at the right level of specificity (i.e. not too vague or too detailed)
3. Image: right image, status, or class for target customers (e.g., cheap, casual, popular, contemporary, cutting edge, risky, young, ordinary, formal, professional, reliable, special, exotic, alluring, exclusive, quality, high-end, traditional, conservative, safe, luxury, glamorous)
4. Memorable: e.g., uses puns, wit, humor, surprising or novel techniques, allusions or associations. e.g., “Just Desserts”
5. Fit: after initially talking about the company, will potential customers immediately understand why the company has that name? (accurate, clear, makes sense)
6. Unique: differentiated in spelling and sound from competitors; unlikely to be confused with someone else; not already trademarked or service marked
7. Strategic: anticipates company growth and future business lines; does not limit the company’s potential domain of business (another reason for meaningless names).

Secondary Criteria

1. Language Universality: has the same or approximate meaning in all the languages or are likely to trade in, or no negative associations (e.g., this is sometimes why Latin or Greek based names, such as LexisNexis, are used, as these are broadly meaningful in all Indo European languages, or why meaningless coinages are invented, such as Skype)
2. Differentiating: emphasizes the important and differentiating elements of the company’s key benefits (unmet needs/solutions relative to competitors), and not emphasize unimportant or undifferentiating elements
3. Authority: tells you who owns or runs or is connected to the company (e.g., famous owners, Fulbright & Jaworski L.L.P.; or if ties to parent or merged company are important)
4. Legal Entity: makes clear the legal form of the entity (indicates scale, solidity, reliability)
5. Locality: indicates where the business or service area(s) are located
6. Capacity or Size: indicates magnitude of the company (big or small, e.g., Global Payment Systems vs. Cherry Creek Boutique)

Miscellaneous Notes

The right frame for evaluating a name is from the point of view of a new entrant into the market. E.g., Nike is household name, but as an entrant name it scores relatively poorly. New names should not be judged by the same standards as old, established names. Companies have many more opportunities to modify or abbreviate their name once it has become established (e.g., Federal Express -> FedEx).

Meaningless names or coinages such as “Skype” are last resorts because they require so much explanation (i.e., expensive marketing) to get established. They are appropriate if none of the relevant criteria below can be satisfied. This would be the case, for example, if you were a global company selling products with nothing in common among them, to everyone in the world. Coinages are by definition “innovative” and are generally associated with a young and informal company image.

Entrants in new product categories may want to coin new names in an attempt to dominate the associations of the whole product category or the activities associated with it. E.g., “to Xerox”, “to Google” for photocopy and search.

Product Category Naming

In most cases, needing to define a new product category is serious drawback for a company. This is because it is beneficial in most cases for potential customers, business analysts, and reviewers to understand the context of your company’s products and services without having to study them in detail. It allows them to pick you out as relevant with little effort; consider you in the right contexts where you have positioned yourself; make correct sense of your marketing messages (context before content); compare you against the right competition; and select you from alternatives in their decision-making processes. It also saves you from having to establish the product category, which is a time consuming and costly affair, and opens you up to a lot of skeptical scrutiny because most markets are suspicious of the impression of innovation carried by the introduction of a new product category. It is often inflated.

New product category naming should only be done if existing product categories are very inadequate, such as when the combination of the most significant categories of potential customers, unmet desires, product benefits, and product features are so different from the nearest existing product category that the business cannot get its message out without a new category. If it needs to be done, the business should restrict itself to subcategories, supercategories, or adjacent categories (i.e., consistent with a coherent product taxonomy). Cells phone vs. Smart phone is one example of an effective creation of new product category. Without the Smart Phone category, a Blackberry is reduced to comparing itself to a Razor, only bulkier with more features.

If you decide to define a new product category, it often advantageous to make the new product category part of the name of your product to help communicate it. E.g., Blackberry Smart Phone

Strategic Prerequisites for Naming

1. Who are your customers?
   1. Business Demographics
   2. Categories
2. What are their unmet needs/desires/self-interests relative to your company?
3. What alternatives do they “hire” to meet those needs, and what industries/product categories are they in?
4. What are the pros and cons of those alternatives?
5. What is special about your alternative (features) and how do its benefits compare?
6. What are your future areas of expansion? Customers, their unmet desires, new products, etc.
7. What kind of image do your customers respond well to relative to your company? (the following scheme is very simple, but surprisingly effective)

Linguistic Naming Techniques

For each of the ideas above, it is useful to brainstorm variant phrases using the guidelines below. These form the creative “soup” out of which effective brainstorming can form names.

• Synonyms
• Metaphor (speaking of one thing in terms of another, e.g., calling a piece of software a “workplace”)
• Humor (esp. word play or puns, e.g., “Just Desserts”)
• Metonymy (using part for whole, or using the name of one thing for that of another associated with it. E.g., referring to the President as “The White House”)
• Association (more important the shorter the name: ideas, feelings, literary, situational, etc.)
• Portmanteau (blending two or more words, e.g., Wikipedia is a blend of “wiki” and “encyclopedia”)
• Foreign or classical terms or etymological roots (e.g., Xerox from the Greek root “xer” meaning dry, or “LexisNexis” meaning a central connecting hub for text; often rely on our (unconscious) etymological familiarity with the terms)
• Acronyms (an abbreviation formed by the initial letters or syllables of a compound name that can be pronounced as a single word)
• Coinages (invented words, usually conforming to English phonology, morphology, and etymological roots)

Group Method for Naming a Company or Product

1. Introduce the problems of a bad name and the benefits of a good name
2. Introduce the criteria for a company name, a product, and a product category
3. Agree on weights of criteria for this situation
4. Try some worked examples with the group
5. Define/agree on the strategic prerequisites of naming
6. Brainstorm synonyms, metaphors, puns, metonyms, associations, foreign or classical terms
7. Brainstorm names
8. Critique against criteria, give a qualitative score, shortlist until you have a list of about four names all with high scores
9. Vote/pick the best name

One of the main contaminating ideas in the discipline of user-interface design is the idea of “user experience”. I mention this with some embarrassment, having been Director of User Experience in the past, run (and continue to run) workshops on User Experience, and worked as a User Experience practitioner for many years. But the elephant in the room was always that the concept never really made any sense, and was not the right way to describe what we were really after—something whose importance is not in question.

To put it simply, what matters is purpose, not experience. Who cares about experience if one’s purposes are not accomplished? Achieve the user’s purposes (which include all the desired qualities of great usability, aesthetic appeal, and inter-personal relationship qualities as criteria for satisfying those purposes), and the experience will take care of itself. The triumph of experience over purpose is principally the work of the media and marketing industries, who seized UI design from the grimy hands of the engineers who had been making unusable software for decades. But this solution was almost as bad as the ailment it was meant to cure, because it greased the rails for a takeover of the disciplines of software design and UI design by the marketing industry, aided an abetted by advertising as the chief use of the web in its early commercial years and arguably still today (as a percentage). The marketing industry’s preference (maybe forced on it by the quality of the products they have to market) for stimulating feelings over satisfying user’s genuine purposes has had and continues to have a deeply negative affect on the quality of software, especially online software. Great for marketing, but not necessarily for software product-development.

To put things back the way they should be, user experience should be properly understood as a species of communication quality, founded on Communication Theory and the advanced disciplines that describe who to analyze, assess, and how to design a communication system: General Systems Theory, Cybernetics, Information Theory, and others. Not advertising, media production, or graphics design—although they have their role to play. The foundation of communication quality is clarity about purpose, which is to be found right in the very heart of the mathematical definition of information, as it was formulated from Shannon’s work by Gregory Bateson (to paraphrase):

Information is encoded news of a difference that makes a difference to the sender relative to some purpose, with feedback loop from the recipient to the sender.